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NY Retirement Fund Sues Chipmaker Qualcomm

The New York State Common Retirement Fund has sued Qualcomm (News - Alert) in an effort to inspect the company’s books and records.The main reason behind the lawsuit in a Delaware court is to find out how shareholder funds are being spent for political purposes, according to a statement from New York State Comptroller Thomas P. DiNapoli.

“As a shareholder in public corporations, the Fund has a right to be properly informed about the use of corporate funds to influence the political process,” DiNapoli said in the statement. “Without disclosure, there is no way to know whether corporate funds are being used in ways that go against shareholder interests. The Fund has taken a leadership role in pressing the issue of disclosure of political spending since the Supreme Court’s Citizens United decision. Shareholders have a right to know how Qualcomm spends money in the political arena.”

“Corporate spending for political purposes should be focused solely on creating shareholder value and should be done in a completely transparent manner. Qualcomm’s lack of disclosure of political spending prevents the Fund from determining if shareholder value is being furthered,” DiNapoli added.

In a statement to the Reuters News Service, Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware, speculated the lawsuit may “not survive scrutiny by a judge who sees it as a fishing expedition.” Or, if it is successful, it could lead to other lawsuits, Elson said.

Qualcomm, a U.S.-based semiconductor company, recently got attention for its approximate $120 million investment in Sharp (News - Alert). The investment is expected to make Qualcomm Sharp’s biggest shareholder. Qualcomm's investment in Sharp will likely be made in two stages.